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Secretary of State Candidate Susan Rice Has a Major Financial Stake in Canadian Tar Sands

Rice holds significant investments in more than a dozen Canadian oil companies and banks that would stand to benefit from expansion of the North American tar sands industry.

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If Rice does get the Secretary of State job, federal ethics officials could recommend that she sell her stock in TransCanada and related companies before deciding on Keystone XL, Auble said. But that’s not a sure thing.

Leading Keystone opponents say they wouldn’t necessarily oppose Rice’s nomination -- but they would want someone else in charge of deciding the pipeline’s fate. “It would be one of the first decisions she would make, and she’s not qualified to make an unbiased decision,” said Jane Kleeb, the executive director of  Bold Nebraska, a group that has fought to block the Keystone XL pipeline.

“It’s one more clear sign that the State Department should not be handling this,” added McKibben (who is also an  OnEarth contributing editor). Both advocates believe the Environmental Protection Agency or the White House Council on Environmental Quality would be more qualified to assess the environmental impacts of Keystone XL. But an executive order issued by President George W. Bush in April 2004  makes the Secretary of State responsible for approving pipelines that cross the U.S. border. Kleeb suggested that Obama could change that order to shift the decision-making responsibility elsewhere.

Environmental advocates (including the  Natural Resources Defense Council, which publishes OnEarth) have sought to block  the Keystone XL pipeline and further development of the Alberta tar sands fields due to their climate impact and potential for pollution and dangerous oil spills. Extracting bitumen -- a heavy, viscous black oil -- requires intensive open-pit mining in the heart of Canada’s boreal forest. More dirty and corrosive than conventional crude, bitumen requires extensive refining to become useable fuel. The entire process uses vast amounts of energy and water and creates three times the global warming pollution of conventional fuel, while shipping the bitumen through pipelines  means an additional risk of corrosion and leaks.

Despite the environmental risks, tar sands development has become a major focus of the Canadian government and pillar of the country’s economy,  championed by Prime Minister Stephen Harper, whose administration has  denounced environmental advocates and First Nations tribes opposed to pipeline construction as extremists. Alberta's tar sands contain the world's  third largest proven oil reserve, but they’re landlocked and remote -- hence the desire for more pipelines to provide Canadian energy companies with access to ports and refineries.

According to her  most recent financial disclosure reports, along with her TransCanada investments, Rice and her husband own at least $1.5 million worth of stock in Enbridge (Canada’s No. 3 oil producer, according to Forbes), Cenovus (No. 7), and Encana (No. 8), as well as at least $1.25 million in Imperial (No. 2), $50,000 to $100,000 in Suncor (No. 1), and $15,000 to $50,000 in Canadian Natural (No. 6). (TransCanada is ranked at No. 5 by Forbes.) The couple has at least $1.25 million invested in Transalta, Alberta's largest coal-fired electricity power producer, and at least $1.5 million in Canadian Pacific Railway,  which transports coal, oil, and gas and has been a major financial beneficiary of the North American energy boom.

On the banking side, Rice has investments totaling at least $5 million and up to $11.25 million in Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and Toronto Dominion. A report by the Dutch consulting firm Profundo Economic Research says  several of these same banks are largely responsible for underwriting the expansion of Canada’s tar sands industry. “Investment in tar sands infrastructure now surpasses that of manufacturing across all of Canada,” according to the report.

Which means that regardless of Keystone XL’s fate, Canadian companies will continue to seek ways to pump bitumen from northern Canada to coastal refineries and ports, where it can be shipped to Europe, China, and other overseas markets. NRDC and other environmental groups  have presented evidence that Enbridge is making plans to reverse a pipeline that currently carries regular crude from the New England coast to Montreal, and use it to ship tar sands oil in the other direction instead.

 
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